Assignment of AGRICULTURAL MARKETING

And Its ProblemsAssigned By:

Madam Saima Kamran Pathan

Names of Group Members

1. Ali Hyder 2k14/BBA/182. M. Nawaz 2k14/BBA/923. Afroz Ahmed 2k14/BBA/2054. Tarique Ali 2k14/BBA/144 We are students of BBA part II in

University of Sindh Jamshoro

Learning Objectives What is Market? What is Marketing? Agricultural Marketing Agricultural Marketing in Pakistan MINISTRY INVOLVED IN AGRICULTURE SECTOR

OF PAKISTAN AGRICULTURE MARKETS Present Stage of Marketing in Pakistan Problems in Marketing System of Pakistan Possible Solutions

MARKET A market is any arrangement (any one of a variety of

systems, institutions, procedures, social relations, and infrastructures) that allows buyers and sellers to freely exchange (the ownership of) any type of goods, services, and information.

A market may emerge spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of ownership of goods, services, and information.

Market participants consist of all the buyers and sellers of a good or service or information who determine its price.

MARKET Markets vary in size, range, geographic scale, location,

types and variety of human communities, as well as the types of goods and services traded.

Some examples include local farmers’ markets, shopping centers and malls, international currency and commodity markets, legally created markets such as for pollution permits, and illegal markets such as the market for illicit drugs.

A market can be organized as an auction, as a private electronic market, as a commodity wholesale market, as a shopping center, as a complex institution such as a stock market, and as an informal discussion between two individuals.

MARKETING

Marketing is defined as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings (goods and services) that have value for customers, clients, partners, and society at large.”

Marketing is a product or service selling related overall activities.

Marketing is used to identify the customer, to satisfy the customer, and to keep the customer.

Marketing is an integrated process of performing market research, selling goods and services to consumers, and promoting them through advertising.

Agricultural Marketing Agricultural Marketing is an integrated process of

moving agricultural products from farms to consumers.

Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro- and food processing, distribution, and sale.

Such activities cannot take place without the exchange of information and are often heavily dependent on the availability of suitable finance.

Agricultural Marketing Agricultural Markets perform an enormous role in

responding to the world population’s daily demand for food products.

Marketing systems are dynamic; they are competitive and involve continuous change and improvement. Businesses that have lower costs, are more efficient, and can deliver quality products, are those that prosper. Those that have high costs, fail to adapt to changes in market demand and provide poorer qualities are often forced out of business.

Marketing has to be customer-oriented and has to provide the farmer, transporter, trader, processor, etc. with a profit. This requires those involved in marketing chains to understand buyer requirements, both in terms of product and business conditions

AGRICULTURAL MARKETING IN PAKISTAN

Prime most interest of the farmer is to get a fair return of his produce in the market. At present the farmers who are spread all over the country make the sales of their surplus produce to the village shopkeepers. Some portion of the output is also sold direct to the market or through market agents. The farmers generally do not get a fair price of agricultural produce is one of the major problems of the farming community in Pakistan.

For example the agricultural goods are generally perishable and cannot be stored for a longer period of time. There are great variations in the quality of produce. The farmer is therefore, generally handicapped and has to sell his produce at an unfavorable place on unfavorable terms.

AGRICULTURAL MARKETING IN PAKISTAN

Agriculture is the major sector of our economy. It not only provides food security to the entire population but also supplements the foreign exchange resources through export of farm produce.

It engages about 20% share to GDP. Despite that rural population constitutes about 60% of the total population yet it has no proper organization to represent their views and project interests.

Agency OverviewFormed

Headquarters: Islamabad, Islamabad Capital Territory

Minister Responsible: Sikandar Hayat Khan Bosan[, Federal Minister For

National Food Security & Research

Agency Executive:Seerat Asghar, Secretary National Food Security

& Research

Website: {http://www.mnfsr.gov.pk/}

MINISTRY INVOLVED IN AGRICULTURE SECTOR OF PAKISTAN

MINISTRY INVOLVED IN AGRICULTURE SECTOR OF PAKISTAN

The Ministry of Agriculture (Ministry of National Food Security & Research), abbreviated as MoA, is a Cabinet-level ministerial department of Government of Pakistan, responsible for implementing, enforcing, developing, and executing the policy on agriculture, rice, livestock, fishing, and farming.

The ministry is governed by the agriculture minister, who must be a member of Parliament of Pakistan. As of 2014 the agriculture minister is Sikandar Bosan and the Parliamentary Secretary For National Food Security & Research is Mr. Rajab Ali Khan Baloch.

Agriculture Markets (Avg. Prices Of Commodities in Rs/100Kg)

Crop Name Lahore Faisalabad Rawalpindi Multan Okara

Wheat - 3388 - 3275 3175

Rice Basmati Super (New)

8750 7000 8250 6125 7550

Maize 2250 2375 2800 2500 2300

Potato Fresh 1100 700 1450 1100 1100

Tomato 3500 3450 3850 3300 4100

Present Stage of Agricultural Marketing in Pakistan

In Pakistan there are three systems of marketing the surplus agricultural produce:

1. Sale in Villages2. Sale in Markets3. Sale in Mandis

Present Stage of Agricultural Marketing in Pakistan

1. SALES IN VILLAGES Most of the farmers (especially small farmers) sell major

share of the surplus produce to the traders and shopkeepers in their own village below the market price.

2. SALES IN MARKETS The second method of selling the surplus produce is in the

scattered markets near the villages.

3. SALES IN MANDIS Another method of selling agricultural produce is through

mandis where commission agents and wholesalers buy the produce at competitive price.

Problems in Marketing System of Pakistan

Major problems in marketing system of Pakistan are as under:

1. Low quality of produce2. Costly transport facilities3. Lack of market knowledge4. Chain of Middlemen/Commission Agents5. Multiplicity of charges6. Lack of storage and warehousing facilities7. Lack of Credit Facilities8. Problems of Produce Collection9. Weight and Measures

10. Lack of Grading

1. Low Quality of Produce The production of agricultural goods is generally of low quality

due to absence of grading, use of uncertified seed, low quality of pesticides/feticides and deliberate adulteration etc. The agricultural produce like cotton, rice, do not enjoy good reputation in the foreign market due to lack of observance of SPS measures. As a result the cash returns to the producers are low. Our cotton is hand picked therefore it maintains quality at picking level but at the ginning stage mixing of trash deteriorate its quality which ultimately fetches less price in international market. The quality of rice is affected by presence of mixture of different varieties at various stages including its high broken percentage. It is grading which improves the quality of produce and adds value to the farm produce if strictly made.

2. Costly Transport Facilities The transport system which consists of roads network,

railways, air ports and shipping services is not only inadequate but also very costly for the transportation of bulky agricultural goods from one place to another. Marketing cost take a too high share of the final price. Lack of proper farm to market roads and inadequate transport facilities deprives farmer to get optimum price of the produce. Specially, vegetables reflect high transport cost. Being perishables their quality is also affected during transportation. The ideal transportation in Asia is referred as Jakarta in Indonesia where the farm to market roads are so developed that the farmers sell their produce the same day and go back. It is generally said that in Jakarta 20 million take lunch and 10 million take dinner.

3. Lack of Market Knowledge The farmers mostly being illiterate do not have detailed

market knowledge as to when, how and where the goods are to be sold. They therefore do not get a fair return of their produce. Marketing intelligence is the need of the time. It is the facility which helps farmer in getting better prices of his produce. Advance knowledge of the information which commodity is required in which market improves efficiency in supplies and prevents prices to fall at un-remunerative levels. A Karachi agriculture commodity market which also stimulates exports seems to be on modern lines as they direct supply of transportation of commodities when they fear price crash.

4. Chain of Middlemen/Commission Agents

There is a long chain of middlemen or marketing intermediaries who are engaged in handling of the farm produce from the grower onto the consumer. Each of these intermediaries take their own margin and tax the return of the grower. Different commodities have different marketing channels. Analysis of paddy returns to farmers from each channel. Although middlemen are service providers but their unnecessary interventions mitigate farmer’s income.

5. Multiplicity of Charges

There are a number of unjustified charges which the farmer has to pay in the market. These charges like commissions, payments to collie, masjid fund, flood fund etc. are a burden on the farmer/seller. The other charges like octopi duties and taxes are also paid by the farmer while transporting goods to the market. There should be check and balance and farmer should not be unnecessarily charged with payments which are not related to marketing produce.

6. Lack of Storage and Warehousing Facilities

There is no or inadequate storage facilities at the farm level or in the houses of the farmers to store the surplus produce. They therefore have to sell the produce immediately after the harvest and thus get low prices for their produce. The warehousing facilities in the markets are also insufficient and expensive. Village godowns may be established for the facilitation of farmers to protect him from distress sales

7. Lack of Credit Facilities The credit facilities are not adequate to meet the

farmer's requirement. Poor farmer is borrows the money from private money lenders at tied conditions

8.Problems of Produce Collection The collection of produce from small farmers is very

expensive and a difficult process. It is a great problem for the efficient marketing.

9. Weight and MeasuresIn various parts of weight and measures are not same. So a farmer suffers a loss at the time of buying selling of his product.

10. Lack of Grading In case of agricultural commodities the mixing of good

and bad products is very common in developing countries like India and Pakistan. There is no proper method of grading these crops. It creates a problem of marketing inside and outside the country.

Possible Solutions Measures Taken by the Government of Pakistan for the

Improvement of Agricultural Marketing:

1. Farm to market roads2. Provision of information3. Establishing standard and grades4. Regulation regarding weights5. Construction of warehouses and rural godowns6. Setting up market organizations7. Regularized markets8. Future Challenges9. Increase in the Credit Facilities 10. Grading of Product

1. Farm to Market Roads The government of Pakistan is allocating huge amount of

money each year in the annual budget for the construction of farm to market roads. The construction of roads not only reduces marketing costs but also makes it easy for the farmers to sell their surplus in the regularized markets. Different road network parameters available in Pakistan are mentioned. There are 7 km roads for 50 km area.

2. Provision of Information The Government is also providing through television,

newspapers, radio information of current market prices of agricultural goods, crops prospects, factor influencing demand etc. The timely information provided by the Government helps the farmers in receiving fair return of their produce. Metrology Department also provides projected temperature and rain fall in agriculture region of the country to selected farmers through mobile phone network.

3. Establishing Standard and Grades The Government through different Medias and market

organizations stresses on the farmers to maintain standards and grades of agricultural produce. The establishment of grades of their agricultural goods brings good returns on their investment, simulates export and helps the Government in earning foreign exchange. Grades provide value to the produce of the farmer. Properly graded produce fetches right price for the farmer.

4. Regulation Regarding Weights The Government has set up marketing organization for

implementing regulations regarding measuring weights, health and safety measures and checking unauthorized deductions by the purchasers.

5. Construction of Warehouses and Rural Godowns. The government is also constructing warehouses and rural

godowns through PASSCO. The construction of godowns makes it easy to store the goods and supply them when these are needed in the market. The storage facility helps in the stabilization of prices of agricultural goods.

6. Setting up Market Organizations. There are various agencies both at the Federal and Provincial

levels which are entrusted with the grading of agricultural products, marketing research, survey etc. The Agriculture Policy Institute (API) consider a number of criteria including cost of production, domestic and world prices etc in recommending support/intervention prices. It also revises prices of important crops including wheat, cotton, sugarcane and rice paddy every year.

7. Regularized Markets There are a number of regularized markets mainly in the urban

areas of the country. However, to safeguard the small growers the federal and provincial governments are presently encouraging the establishment of regularized markets in the rural areas too.

8. Future Challenges Under the WTO regime, there is an urgent need to educate

growers. They shall now have to concentrate on improving the quality of products by proper grading, standardization and storage. The Government both at the Federal and Provincial level shall have to develop efficient and strong marketing infrastructures for timely availability of the goods at the right place, at the right time, at the right price and in the suitable form needed in the domestic and international markets.

9. Increase in the Credit Facilities The government should increase the credit facilities to

the small farmers. No doubt all the commercial banks are providing this facility to the farmers but still it is not sufficient.

10.Grading of Product There are various agencies which are busy in grading

agricultural product. There is a need to expand these organizations for effective of marketing system